The 3 best tax tips to help you prepare for this tax season.

January 4, 2022

With the new year finally here, that can mean two things: new resolutions and the upcoming tax season.

We can make a pretty good guess about which option you’d rather focus on. That’s why we came up with our three best tips for the upcoming tax season that you should keep in mind.

Our top tax tips are:

  1. Take advantage of COVID benefit repayment options
  2. Find the best method to claim your work-from-home expenses
  3. Check to see if you now can claim the Canada Workers Benefit

Keep reading to learn how to get the most out of your 2021 return with these tips!

Tip 1: Repaying your COVID-19 benefits can lower the taxes you owe this year

During the pandemic, the government created benefit programs to support Canadians. You might have received an emergency benefit, like the Canada Emergency Response Benefit (CERB), but later found out you weren’t actually eligible for it.

The good news is there have been some changes on how you can claim your repayments. You now have until January 1, 2023, to repay your federal COVID-19 support benefits. Plus, you can use your repayments to lower the taxes you owe when you file your return!

Why would I have to repay a COVID-19 support benefit I received?

You might have to repay the COVID-19 support benefits you received if:

  1. Your situation changed since you applied
  2. You made a mistake while applying
  3. You received more financial assistance than you were eligible for

You’ll receive a letter from the CRA, Service Canada, or Revenu Québec notifying you if you need to repay any COVID-19 support benefits you received. To learn more, check out our blog on what you need to know about repaying COVID-19 benefits.

How do I know how much I repaid?

If you received COVID-19 support benefits through the CRA, you’ll receive a T4A slip showing how much you repaid.

If you received COVID-19 support benefits through Service Canada, you’ll receive a T4E slip showing how much you repaid.

What’s the advantage of repaying before 2023?

If you claim your repayments for 2021 and 2022, you have the option of choosing which year you want to claim the deduction. Otherwise, if you claimed your repayments as a deduction, you would have to file them in the same year you repaid them. What this deduction does is the taxes you owe from your return will be lowered by the amount you’ve sent to the CRA, Service Canada, or Revenu Québec to repay your COVID-19 support benefits.

To get the most out of your return, choose to claim the amount you repaid all at once or divide it between the years you repaid your benefits. This means if you repaid COVID-19 support benefits this year and last year, you have two options:

  1. You can claim the total amount you repaid on your 2021 return
  2. You can claim part of the amount you repaid on your 2020 return, and the rest on your 2021 return

Be careful! If you decide to split up your repayments, make sure you don’t claim any repayments on your 2021 return that you already claimed on your 2020 return.

Deciding how to deduct your COVID-19 support benefit repayments can be confusing, but we’re here to help. Visit an H&R Block office near you to speak to a Tax Expert in person, or if you’re using our DIY tax software, find the best method for you with our Ask a Tax Expert service or by booking an Expert Review.

Tip 2: Take advantage of the best method to claim your work-from-home expenses

If you, like many other Canadians, were working from home because of COVID-19, you might have already heard that you can claim some of your home office expenses on your tax return.

There are two ways to calculate how much you can claim: the flat-rate method and the detailed method.

What’s the difference?

If you choose to use the flat-rate method, you can claim $2 for each day you worked at home. The government recently increased the total amount of days you can claim from 200 days to 250 days, which means you can now get up to $500 back for your expenses.

If you want to claim the amount you actually paid for your work-related expenses instead of a flat rate, you’ll need to use the detailed method. However, there are some rules about what home office expenses you can claim. You’ll also need to provide documents, like your receipts and a signed form from your employer.

For more information about these methods, check out our blog on tax relief if you worked from home due to COVID-19.

If you don’t know which method is better for you, it’s best to get an expert’s advice! Visit an H&R Block office near you to speak to a Tax Expert in person, or if you’re using our DIY tax software, find the best method for you with our Ask a Tax Expert service or by booking an Expert Review.

Tip 3: Find out if you qualify for the Canada Workers Benefit (CWB)

The Canada Workers Benefit (CWB), previously known as the Working Income Tax Benefit (WITB), is a refundable tax credit for low-income individuals and families. With some new rules, you might be able to claim the CWB on your 2021 return even if you couldn’t on previous returns!

To learn more about the CWB and to find out if you might be eligible, visit the H&R Block Online Help Centre.

A higher income threshold for individuals and families

The income level has been increased, which means more Canadians can claim this credit.

Individuals who earned up to $32,244 in 2021 can now apply for this benefit, which is an increase from the previous income limit of $24,573.

Families with a household income of up to $42,197 are now eligible for the CWB as well. In previous years, the limit was $37,173.

The new secondary earner exemption

A new “secondary earner exemption” has been introduced, meaning the income your spouse or common-law partner earned during the year might not impact your family’s eligibility for the CWB.

With the new “secondary earner exemption,” as long as your spouse or common-law partner meets the eligibility requirements, you can exclude up to $14,000 from your household income amount. This means more families will be able to claim this credit on their 2021 return.

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